Posted at 09:32 PM in Miscellaneous | Permalink | Comments (1)
By Kevin E. Noonan --
A little over two years ago, U.S. District Court Judge Manish Shah sitting in the Northern District of Illinois held that AbbVie did not violate Sections 1 or 2 of the Sherman Antitrust Act by amassing a large number (132) of patents to protect its best-selling drug, Humira® (adalimumab) (see "An Analysis of a Failed Biosimilar Antitrust Class Action"). Yesterday, in Mayor and City Council of Baltimore v. AbbVie Inc., the Seventh Circuit Court of Appeals affirmed the District Court's decision to dismiss the complaint in a unanimous verdict that took the Court sixteen months to hand down.
To recap, the issue arose in a class action lawsuit against AbbVie and AbbVie Biotechnology Ltd. by consumer groups, drug wholesalers, and unions (including the City of Baltimore, Miami Police Department insurance trust fund, and a Minnesota-based employee welfare benefits plan for workers in the pipe trade industries), as well as corresponding state law causes of action for Alaska, California, District of Columbia, Georgia, Illinois, Nevada, New Hampshire, North Carolina, Utah, and West Virginia. The basis of the complaint was AbbVie's actions in seeking and obtaining additional patents when the patent on the adalimumab molecule itself (U.S. Patent No. 6,090,382) was set to expire on December 31, 2016. AbbVie filed 247 patent applications, resulting in 132 patents, and this behavior was sufficiently anticompetitive, plaintiffs argued, that it rose to the level of an antitrust violation under the Sherman Act.
The District Court discerned the following allegations in the class action Plaintiffs' complaint:
• that AbbVie "cornered the market" on Humira (and other, unnamed biosimilar drugs) by "anticompetitive conduct";
• that AbbVie obtained and asserted patents "to gain the power it needed to elbow its competitors" out of the Humira market;
• that AbbVie then entered into agreements with those competitors "to keep their competing drugs off the market" (and then, paradoxically, "gave those competitors permission to market their drugs in Europe"; unremarked is that AbbVie gave those same competitors permission to enter the U.S. market a few years thereafter, without having to face those dastardly and profuse patents).
The District Court dismissed the complaint under the rationale that:
Plaintiffs say that AbbVie's plan to extend its power over Humira amounts to a scheme to violate federal and state antitrust laws. But what plaintiffs describe is not an antitrust violation. AbbVie has exploited advantages conferred on it through lawful practices and to the extent this has kept prices high for Humira, existing antitrust doctrine does not prohibit it. Much of AbbVie's petitioning was protected by the Noerr Pennington doctrine, and plaintiffs' theory of antitrust injury is too speculative.
The District Court agreed with AbbVie that "there is nothing illegal about amassing a broad portfolio of legitimate patents" under Sherman Act § 2 and, to the extent that some of these patents may turn out to be improvidently granted, "the Noerr–Pennington doctrine immunizes them from liability." Regarding the Section 1 allegations, the District Court agreed with Defendants that these settlement agreements don't violate the Sherman Act because "they[] allow AbbVie's competitors to enter the market before the expiration of AbbVie's patents, do not involve any reverse payments from AbbVie (the patentee) to Amgen, Samsung Bioepis, and Sandoz (the alleged infringers), and only divvy up the market in ways consistent with AbbVie's patent rights." And while the District Court agreed that even if a single one of AbbVie's patents are not invalid and infringed that would have been sufficient to keep the biosimilar applicants from marketing Humira biosimilars until that patent expired (a date that would have been very much later than January 2023), for Plaintiffs' antitrust allegations to create liability against Defendants, Plaintiffs would need to show that AbbVie had obtained each and every one of its patents "unlawfully," which the Court found was unlikely, as a "but-for" cause of Plaintiffs' alleged injury.
The 7th Circuit affirmed, in an opinion by Judge Easterbrook joined by Judge Wood and Judge Kirsch. The opinion begins with a litany of precedent that the parties did not rely on (for AbbVie, Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977) on jurisdictional grounds, and for plaintiffs, Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp., 382 U.S. 172 (1965) for inequitable conduct or "fraud on the Patent Office"). But the heart of the Court's opinion can be found in almost its first legally substantive sentence, where the Court asks plainly "what's wrong with having lots of patents"? And further, the Court states that "[t]he patent laws do not set a cap on the number of patents any one person can hold—in general, or pertaining to a single subject," citing In re Brand Name Prescription Drugs Antitrust Litigation, 186 F.3d 781 (7th Cir. 1999). Tellingly the opinion goes on to note that "[t]ech companies such as Cisco, Qualcomm, Intel, Microsoft, and Apple have much larger portfolios of patents" and "Thomas Edison alone held 1,093 U.S. patents." Finally in this regard the Court notes that the Federal Trade Commission tried, and failed, to establish antitrust liability against Qualcomm based on the sheer number of patents that company had amassed. FTC v. Qualcomm Inc., 969 F.3d 974 (9th Cir. 2020).
The Court recognizes the distinction between valid and invalid patents, but notes that Plaintiffs did not allege that they will invalidate all 132 of AbbVie's patents. Nor was the Court persuaded by the fact that "the 132 patents can be traced to continuation applications from 20 root patents" (which "seem neither here not there" to the panel). As for the argument that these patents are "weak" the Court says this "leaves us cold" because a weak patent is just one having limited scope not one that is "illegitimate." Those arguments are appropriate in proceedings like inter partes review the opinion states, for which the Patent Trial and Appeal Board have found more consistently that challengers have failed (13 instances) to satisfy the statutory requirements for challenge than it has found a challenged patent invalid (3) (and noting that in still other instances AbbVie has prevailed before the Board).
The Court also recognizes the disjointed nature of Plaintiffs' argument that, while eschewing Walker Process-based allegations maintained its Section 2 challenge merely because AbbVie obtained the (presumptively) valid patents and asserted them against competitors. While the law recognizes that "objectively baseless petitions" to the government can be an antitrust violation, Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U.S. 49 (1993), like the District Court the panel noted that AbbVie had a "batting average" of .534 for patent procurement (a 53.4% allowance rate), which "cannot be called baseless." But without this ground "[t]rying to conjure liability out of successful petitions for governmental aid in blocking competition runs into the Noerr-Pennington doctrine according to the opinion, Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961); Mine Workers v. Pennington, 381 U.S. 657 (1965). Other grounds for finding antitrust liability (unsuccessful petitioning that increases competitors' costs, such as filing frivolous lawsuits, citing BE&K Construction Co. v. NLRB, 536 U.S. 516 (2002)) did not exist under the circumstances before the Court (although the panel recognized there may be ways for AbbVie to assert their patents that the Noerr-Pennington doctrine would not protect).
Turning to the Section 1-based allegations arising from the settlement agreements, the opinion first notes that those settlement agreements permitted biosimilar entry much earlier than the expiration date of at least some of AbbVie's patents. The Court views these agreements as "compromises" and the agreements do not violate the Sherman Act under Supreme Court precedent in favor of settlements in litigation. But the opinion states that the basis of one such possible antitrust violation, falling under the Court's FTC. v. Actavis decision, cannot arise here because there is no exclusivity period for the first biosimilar filer as there was in Actavis for the first ANDA filer. "The payors do not contend that there is anything fishy or anticompetitive about the settlements allowing entry in 2023 without any payment from AbbVie to the potential entrants," the opinion asserts, and acknowledges Plaintiffs' argument that the differential entry date of Humira biosimilars in Europe (2018) and the U.S. (2023) could produce a similar "reverse-payment deal" here. Neither the District Court nor this panel were persuaded because there was no "pay-for-delay" ("0+0=0") in these settlements. There were also factual distinctions between the settling parties and the legal and regulatory conditions in the European countries that were contrary to Plaintiffs' arguments that somehow somewhere someone had or could make money they should not have been able to make under these agreements. And to the extent Plaintiffs' argument sounded in the economic theory of "opportunity costs" the panel understood the Supreme Court's Actavis decision to have "considered, and rejected, the argument that an opportunity cost is the same as a reverse-payment settlement."
The District Court characterized Plaintiffs' arguments as "a new kind of antitrust claim" that "brings together a disparate set of aggressive but mostly protected actions to allege a scheme to harm competition and maintain high prices." Attorneys making novel legal theories of course is how the law progresses. Indeed, the current Chair of the Federal Trade Commission became something of an enfant terrible based on her law review article on antitrust in the technological age (Khan, Lina M. (January 2017), "Amazon's Antitrust Paradox", Yale Law Journal, 126 (3): 710–805). But a risk of some legal theories arises when they are outcome oriented to the extent that they ignore traditional legal principles in search of the desired outcome. (The dissent by Chief Justice Roberts in Actavis is illustrative of the dangers attendant thereupon.) And the mantra of the undesirability if not illegality per se of so-called patent thickets for blockbuster drugs can appear politically expedient but is not supported by the facts, as shown inter alia by Mossoff, Unreliable Data Have Infected the Policy debates over Drug Patents, Policy Memo, Hudson Institute, January 2022. For now, this latest flight of legal fancy has crashed on the rocks of antitrust jurisprudence reality but it would be imprudent not to expect other attempts prompted by patent protection of blockbuster drugs (and their related costs) to arise.
Posted at 10:37 PM in Miscellaneous | Permalink | Comments (0)
By Michael Borella --
Given the recent bust cycle of cryptocurrencies and non-fungible tokens (NFTs), all things blockchain are currently tainted with words such as "bubble", "scam", and "fraud". But blockchain technology, which is what enables cryptocurrencies and NFTs, remains a remarkably innovative tool. When implemented properly, it can be used to create an immutable distributed digital ledger of transactions that is highly resistant to most forms of hacking. Indeed, evidence of the efficacy of blockchain to solve specific real-world problems is beginning to emerge. If all you can think of is Bitcoin or bored apes when someone mentions "blockchain", perhaps it is time to reconsider your understanding of the field.
Particularly, the notion of smart contracts -- snippets of computer-executed code that can be embedded into a blockchain to control the transfer and use of digital assets -- has opened the door to a world of innovation. NFTs are the most well-known use of smart contracts, but other uses include banking, investing, real estate, gaming, and many more.
Not unlike the world-wide web circa 1993, blockchain is a new frontier, the applications of which are vast. It is hard to see where the technology is going or how it will be used in the future. The most likely outcome is that there will be a large number of spectacular failures, but also a few successes that could potentially be integrated into 80-90% of software moving forward.
Patent assignments at the U.S. Patent and Trademark Office (USPTO) are stored in a publicly-accessible database operated by the USPTO. These assignments record various entities' interests in a patent or patent application through a chain of title.
The initial ownership of a patent asset usually lies in its inventors. The inventors typically assign their rights to the patent asset to another entity (e.g., an employer). Liens against these interests can be recorded, as well as further transfers to other entities through sale, mergers and acquisitions, legal proceedings, and so on.
Could the USPTO implement its assignment database as a privately-controlled blockchain? In short, the answer is "yes" -- and doing so could possibly enable a number of interesting use cases.
In fact, the USPTO's assignment database is a natural candidate for recording in a blockchain. It is largely a write-only database of transactions in which records are rarely expunged (see M.P.E.P. § 323). As new assignments are recorded, they can be added in new blocks. These blocks can be mined (verified) by USPTO computer systems to ensure than they are proper. Advantageously, standard smart contracts could be used to make assignment verification automated and effectively instantaneous for the vast majority of transactions. This would be a significant improvement over today's manual verification process which can take weeks or months in some situations.
For example, before an assignment transaction is placed in a block on the blockchain, the USPTO could verify that the assignor has the right to assign the patent asset. Since the blockchain will record each asset's chain of title, the current ownership of the asset is known. Thus, for instance, if the blockchain specifies that the asset was initially owned by entity A, transferred to entity B, then transferred to entity C, and has no subsequent transfers, entity C is the current owner. Therefore, only entity C has the authority to transfer the asset to other entity, say entity D. If some other entity E attempts to transfer or place any type of encumbrance on the asset, this transaction will fail mining procedures and not be placed on the blockchain. As a consequence, the current ability for erroneous or fraudulent patent assignments to be filed effectively disappears.
Of course, this means that all entities with interest in a patent asset would need to have an account or identity with the USPTO's assignment blockchain, and keep its credentials secure from conventional hacking attempts (e.g., phishing). Many patentees already have such accounts in place with the USPTO. Also, keeping an account secure is already a requirement for any person or entity using online banking, ecommerce, and so on. The risk is well-understood and widely accepted at this point, and use of blockchain does not make the system any less secure.
If a patentee's credentials are stolen and fraudulent transactions are successfully placed on the blockchain, this could be resolved in court, as it would be today. To facilitate correction of such transactions, the USPTO could have the sole authority to place an "override" transaction on the blockchain that nullifies a specific previous transaction, and therefore returns title for an asset to its rightful owner.
It may not be possible or desirable for all inventors to have their own USPTO assignment blockchain accounts, so an initial assignment agreement from the inventors to an assignee could be verified by including form language in a programmatically-interpretable document. As long as the names of the inventors match those on the filed application and are accompanied by their verifiable digital signatures on the assignment proper, it would be assumed by smart contract code that this assignment is valid. Again, disputes to such validity could be challenged in courts, as they are today.
Further, mechanisms to add inventors to an asset or remove inventors from an asset would need to be supported.
Another aspect of the proposed mining that would be beneficial is that it would have a low computational load compared to say, Bitcoin mining, since there would be no need to solve proof-of-work puzzles. There would also be no need to reward the miners with coins or tokens from the blockchain (to be clear, this blockchain need not implement any coins, tokens, or currency -- it could be purely a ledger of transactions). The USPTO's current systems would likely be able to handle the computational cost of mining. Alternatively, other U.S. government entities (or interested third parties) could offer servers to mine transactions and store their own copies of the assignment blockchain (of course, the blockchain consensus protocol would have to be arranged so that the USPTO has ultimate control over the determination of whether a transaction is valid).
A USPTO assignment blockchain would have a number of interesting potential properties that could be exploited by way of smart contract.
As one example, certified copies of a patent asset could be minted on demand as an NFT. For a small fee, a unique PDF or image file could be generated and digitally signed by the USPTO to verify its authenticity. This could even be used to replace patent plaques typically given to inventors by their employers with NFT-based awards instead.
Also, smart contracts could be used to put various types of conditions and obligations on a patent asset. For example, companies might incentivize their inventors to disclose more inventions by placing an obligation on all future owners of an asset to pay the inventors some percentage of future licensing, sales, settlements, or judgments involving to that asset (e.g., the inventors get 10% of the total value of such transactions). This would allow inventors of commercially-valuable patents to enjoy the financial benefits of their inventions in a fashion that is more equitable than, say, a one-time nominal payout upon filing or grant.
Since patents can only be asserted when all owners agree to do so, such contracts would have to clearly separate ownership of a patent asset from an obligation of the owner to compensate a previous owner for the asset's future revenue.
Another potential use of smart contracts would be for ownership of an issued patent to revert to its previous owner should the current owner fail to pay maintenance fees on time. Then, the previous owner would have a short grace period in which it could either pay the maintenance fees or let the patent expire. Or, the initial owners of the patent could specify in a smart contract that the patent will be dedicated to the public within, say, 10 years of issuance regardless of who owns the patent at that time.
A virtually unlimited number of additional uses for a blockchain-based assignment database may be possible. As was the case for the web in the early 1990's, there is a "wild west" aspect to blockchain in the early 2020's. But most experts agree that the underlying technology is sound and highly adaptable. It remains to be seen if, when, and how, these advances will impact patent operations.
Posted at 09:00 PM in Miscellaneous | Permalink | Comments (2)
By Kevin E. Noonan --
Personal jurisdiction is one of those basic concepts in civil procedure that evokes strong memories in most lawyers, of their first year in law school, cases like International Shoe, Burger King, Helicopteros, and World-Wide Volkswagen, and perhaps even a bit of painful nostalgia for a time when they were maybe a little overwhelmed by the process of learning the law. But there is a reason considerations like personal jurisdiction are part of the basic introduction to legal education, not the least of which is the real-world consequences that can arise involving them. A case illustrating this reality was decided recently in Apple Inc. v. Zipit Wireless, Inc. (and as a bonus, the Federal Circuit expressly disclaimed a misapprehension by the District Court that it had enunciated a bright line rule regarding personal jurisdiction in patent cases).
The lawsuit on appeal was a declaratory judgment action brought by Apple in the Northern District of California, but the dispute predated the filing of Apple's complaint by several years. As described in the Federal Circuit's opinion, Zipit approached Apple in 2013 regarding its assigned patents, U.S. Patent Nos. 7,292,870 and 7,894,837, which claimed "wireless instant messaging devices that use Wi-Fi to send and receive instant messages." For the next three years, there were "several rounds of correspondence" between them as well as an in-person meeting in Cupertino, home of Apple corporate headquarters (and in the Northern District). This correspondence and these communications involved whether Apple was willing to purchase the patents outright or license them, inter partes review proceedings involving the patents, and whether Apple was infringing based on technical details of its products (as well as the possibility of willful infringement). These discussions were fruitless and Zipit filed a patent infringement lawsuit in the Northern District of Georgia on June 11, 2020, which Zipit two weeks later voluntarily dismissed without prejudice; this was followed by Apple filing the declaratory judgment suit that was the basis for this appeal nine days after Zipit voluntarily dismissed its Georgia action.
Because it is relevant to the personal jurisdiction question, the opinion set forth in some detail the history of the negotiations between the parties:
The record before the district court indicates that Zipit first traveled to Apple's Cupertino headquarters on December 3, 2013. Following this in-person meeting, the parties had "at least" four "detailed calls" in December 2013, February 2014, and March 2014. During these meetings and calls, Apple and Zipit discussed licensing the patents-in-suit and Apple's contentions that it "does not practice any Zipit patent claims" and that the "patents[-in-suit] are invalid." Indeed, the parties went so far as to exchange competing drafts of a license agreement in August and September 2014 but ultimately did not reach any agreement. Zipit traveled to Apple's Cupertino offices for a second in-person meeting to continue discussions on January 13, 2015.
Following the January 2015 meeting, Apple and Zipit exchanged numerous letters and emails throughout 2015 and 2016. The first email, dated July 18, 2015, was sent by Mr. Stephen Risley (Zipit's outside counsel) regarding "Apple's Ongoing Infringement" of the patents-in-suit. This email, directed to Apple's in-house counsel (Mr. Rudhir Patel) sought a "definitive response" from Apple regarding the parties' ongoing discussion of Apple's "purchase and/or license" of the patents-in-suit. Referencing a discussion that had taken place the day prior, Mr. Risley also attached for Apple's review Zipit's opposition brief to a petition for IPR of the '837 patent. He also noted that additional briefs as to other patents were forthcoming. Mr. Risley concluded: "I understand that Apple will review Zipit's IPR briefs and respond to Zipit in 1-2 weeks."
Apple responded two months later. On September 25, 2015, Mr. Patel sent Mr. Risley a letter reiterating Apple's view that it "does not need a license" to the patents-in-suit "because Apple does not practice any" claims of the patents-in-suit and the claims are invalid. In describing its grounds for noninfringement, Apple referred specifically to deficiencies in claim charts it had received from Zipit. Apple also stated that its view that the claims were invalid was "confirmed by [its] review of the materials before the [Patent Trial and Appeal Board], and additional prior art not being considered" in the pending IPRs.
The discussions escalated. On October 14, 2015, Mr. Risley sent a responsive letter addressed to Mr. Patel (with Apple's Cupertino office listed on the address line) regarding "Apple's Ongoing Willful Infringement" of the patents-in-suit. In the letter, Mr. Risley conveyed Zipit's "continue[d]" belief that "Apple has and continues to willfully infringe" the patents-in-suit. He concluded the letter by referencing willful infringement a second time: "Zipit is confident that if it becomes necessary a Court will view your September 25, 2015 [letter] as nothing more than a transparent attempt by Apple to justify Apple's past, present, and future willful infringement of Zipit's patents." Apple responded to this letter on December 8, 2015. Mr. Risley sent another email to Mr. Patel five months later on April 7, 2016. In this email, Mr. Risley informed Apple that the Board had "confirmed the patentability of all claims" of the patents-in-suit. He concluded the letter by once again stating Zipit's belief "that Apple has and continues to infringe" the patents-in-suit.
The parties thereafter had another phone call on April 26, 2016, after which Mr. Patel, on May 2, 2016, responded in writing to Zipit's latest letter. Mr. Patel reiterated Apple's belief that the patents-in-suit are invalid notwithstanding the Board's patentability determination in the IPR proceedings. In response to Zipit's continued allegations of infringement, Apple explained that it had "repeatedly refuted those allegations" and that Zipit had failed to substantively respond to Apple's positions in this regard. The letter concluded: "Should Zipit substantively respond to Apple's explanation of why Apple's products do not fall within the scope of [the patents-in-suit] Apple will further consider Zipit's positions [citations to the record deleted throughout].
The District Court granted Zipit's motion to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). Although the District Court found that Apple had established "minimum contacts" that satisfied the California long-arm statute and were consistent with constitutional due process limitations on jurisdiction (and that Zipit had not rebutted Apple's "presumptively reasonable" showing thereof), the District Court held that the Federal Circuit had set forth a bright-line rule that "the exercise of personal jurisdiction . . . would be unconstitutional when '[a]ll of the contacts were for the purpose of warning against infringement or negotiating license agreements, and [the defendant] lacked a binding obligation in the forum,'" under Levita Magnetics Int'l Corp. v. Attractive Surgical, LLC, Case No. 19-cv-04065-JSW, 2020 WL 4580504, at *6 (N.D. Cal. Apr. 1, 2020), and Breckenridge Pharm., Inc. v. Metabolite Lab'ys, Inc., 444 F.3d 1356, 1364 (Fed. Cir. 2006). This appeal followed.
The Federal Circuit reversed and remanded, in an opinion by Judge Stoll, joined by Judges Hughes and Mayer. The Court began by acknowledging that the California long-arm statute extended "to the full extent allowed by the due process clauses of the United States Constitution" and thus limited its analysis accordingly. Citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980), the opinion asserts that the issue in determining the appropriateness of finding due process arising in personal jurisdiction situations was whether a defendant's "conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." The three factors set forth in Supreme Court opinions involving personal jurisdiction set out in the opinion are (1) whether a defendant has "purposefully directed" activities at forum residents; (2) whether the claim to be adjudicated "arises out of or relates to" defendant's activities in the forum; and (3) whether asserting personal jurisdiction over the defendant would comport with "'traditional notions of fair play and substantial justice" under the World-Wide Volkswagen decision. As the opinion sets out, "[t]he first two factors comprise the 'minimum contacts' portion of the jurisdictional framework . . . .," citing Jack Henry & Assocs., Inc. v. Plano Encryption Techs. LLC, 910 F.3d 1199, 1204 (Fed. Cir. 2018). Under circumstances where minimum contacts are satisfied, the Court says, assertion of personal jurisdiction is presumptively reasonable except where the presumption is successfully rebutted by the defendant.
Here, the Federal Circuit, considering the litany of contacts Zipit had with Apple, a resident of the forum, agreed with the District Court that the minimum contacts standard had been satisfied. This conclusion was supported by the Federal Circuit's finding of personal jurisdiction in Xilinx, Inc. v. Papst Licensing GmbH & Co., 848 F.3d 1346, 1356 (Fed. Cir. 2017), where defendant's activities consistent of two notice letters and a single visit with the accused infringer; the panel found "Xilinx [to be] virtually indistinguishable from the facts of this case, where Zipit likewise sent multiple communications to Apple in California and traveled twice to California to discuss allegations of infringement and the prospect of Apple licensing or purchasing the patents-in-suit." (The opinion sets forth several other decisions supporting personal jurisdiction under analogous circumstances.) The Federal Circuit rejected Zipit's argument that its conduct was not sufficient to raise a reasonable presumption that the minimum contacts standard had been satisfied based on the Court's decision in Autogenomics, Inc. v. Oxford Gene Tech. Ltd., 566 F.3d 1012, 1016 (Fed. Cir. 2009). The panel found significant differences ("material factual distinctions") in the facts here and in Autogenomics (which are set forth in a footnote).
The opinion traced back the District Court's error in finding a bright-line rule against asserting personal jurisdiction based on notice letters to Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc, 148 F.3d 1355, 1360 (Fed. Cir. 1998), where the Federal Circuit said that "[p]rinciples of fair play and substantial justice afford a patentee sufficient latitude to inform others of its patent rights without subjecting itself to jurisdiction in a foreign forum." But while this sentiment and the policy arising from it are "no doubt relevant," according to the opinion, particularly to the extent it is directed towards settlement of incipient lawsuits, the panel rejected the argument by Zipit and the District Court's opinion that it reflects or establishes a patent-specific, bright-line rule, citing for example Trimble Inc. v. PerDiemCo LLC, 997 F.3d 1147, 1156–57 (Fed. Cir. 2021), and setting out several analogous personal jurisdiction decisions in other circuits over controversies in other areas of law.
But such a policy does not overcome the constitutional considerations set forth by the Supreme Court in Burger King and other personal jurisdiction cases, the panel opined. To be perfectly clear, the opinion states that:
[T]he district court erred in reading our precedent as creating a bright-line rule that communications directed to "the attempted resolution" of the parties' dispute regarding the patents-in-suit trumps all other considerations of fairness and reasonableness. Although some of our earlier precedent relying on Red Wing Shoe suggests that there is such a bright-line rule . . ., Supreme Court precedent (both pre- and post-Red Wing Shoe) has made clear that jurisdictional inquiries cannot rest on such bright-line rules—there are no "talismanic jurisdictional formulas." Rather, "'the facts of each case must [always] be weighed' in determining whether personal jurisdiction would comport with 'fair play and substantial justice'" [citations omitted].
Having dispensed with this ground of error, the opinion then assessed whether Zipit satisfied the Supreme Court's counter rubric regarding whether a defendant could overcome the reasonable presumption of personal jurisdiction on the basis of:
[1] "the burden on the defendant," [2] "the forum State's interest in adjudicating the dispute," [3] "the plaintiff's interest in obtaining convenient and effective relief," [4] "the interstate judicial system's interest in obtaining the most efficient resolution of controversies," and [5] the "shared interest of the several States in furthering fundamental substantive social policies."
While recognizing that Zipit had asserted some evidence relating to some of these factors (e.g., that there would be some burden in litigating in California because the company, its officers, and employees including inventors resided in South Carolina), on balance Zipit did not assert sufficient facts to convince the Federal Circuit that it had rebutted the reasonable presumption that the District Court could properly exercise personal jurisdiction over Zipit. (It didn't help Zipit's argument that their executives had travelled to the district twice to meet with Apple during licensing negotiations.) Even Zipit's filing its Georgia lawsuit was evidence that it should have "reasonably foreseen" that Apple would respond with a declaratory judgment suit according to the Federal Circuit.
While acknowledging that "we have no doubt that Zipit's initial contacts with California can be fairly viewed as attempting to settle its dispute with Apple out of court, e.g., by way of a patent license," which was "an important fact we consider and weigh in Zipit's favor," the opinion noted that "Zipit's communications with Apple arguably went further, extending over the course of several years and reaching beyond license negotiations to include the sale of its patents." While this attempt at settlement was on Zipit's side of the scales under the Burger King test, the panel held that, on balance, these considerations did not counterbalance their opinion that Zipit had not rebutted the reasonable presumption that the minimum contacts standard had been satisfied and that the District Court could exercise personal jurisdiction over Zipit within the bounds of constitutional due process.
Apple Inc. v. Zipit Wireless, Inc. (Fed. Cir. 2022)
Panel: Circuit Judges Hughes, Mayer, and Stoll
Opinion by Circuit Judge Stoll
Posted at 11:48 PM in Federal Circuit, Miscellaneous | Permalink | Comments (1)
By Donald Zuhn --
According to a number of online reports, several global law firms have decided to close their Russian offices in response to Russia's invasion of Ukraine. Among the firms that are reported to have closed their Russian offices (or that are in the process of doing so) are:
• Allen & Overy
• Baker Botts
• Borenius
• Bryan Cave Leighton Paisner
• Clifford Chance
• Debevoise & Plimpton
• Dechert
• Eversheds Sutherland
• Freshfields Bruckhaus Deringer
• Gowling WLG
• Herbert Smith Freehills
• Hogan Lovells
• Latham & Watkins
• Linklaters
• Morgan, Lewis & Bockius
• Norton Rose Fulbright
• Squire Patton Boggs
• White & Case
• Winston & Strawn
Several other firms are reported to have suspended their operations in Russia, including:
• Akin Gump Strauss Hauer & Feld
• Cleary Gottlieb Steen & Hamilton
• Mannheimer Swartling
Information regarding the impact of Russian's invasion of Ukraine on law firm operations can be found here:
• "Law Firms Respond to Russia's Invasion of Ukraine: How the Legal Industry & the Public Can Help," National Law Review, March 13, 2022.
• John Malpas and Madeline Anderson, "Hogan Lovells latest to announce Moscow office closure as five more US firms reveal Russia withdrawal plans," Global Legal Post, March 11, 2022.
• Sarah Martinson, "4 More BigLaw Firms Close Offices In Russia," Law360, March 11, 2022.
• David Thomas, "Factbox: Global law firms in Russia react to Ukraine invasion," Reuters, March 11, 2022.
• Megan Tribe, "White & Case to Close Moscow Office, Joining Other Exits," Bloomberg Law, March 11, 2022.
• Jonathan Ames, "Freshfields, Eversheds and Gowling close their Russian practices," The Times, March 10, 2022.
• James Booth, "Allen & Overy and Clifford Chance to close Moscow offices as law firms rush for exit in Russia," Financial News, March 10, 2022.
• Louis Goss, "Clifford Chance to wind down Moscow offices amid scrutiny over law firm's links to oligarchs," City A.M., March 10, 2022.
• Kate Ackley, "Big K Street shops will close offices in Russia," Roll Call, March 9, 2022.
• Lachlan Markay and Sarah Mucha, "Big Law exits Russia," Axios, March 9, 2022.
• Rachel Rippetoe, "6 BigLaw Firms Exit Russia As Ukraine War Rages On," LAW360 Pulse, March 9, 2022.
• David Thomas, "More law firms exit Moscow as Russia wages war in Ukraine," Reuters, March 9, 2022.
• Meghan Tribe, "Five Big Law Firms Close Moscow Offices as Ukraine War Rages," Bloomberg Law, March 9, 2022.
Posted at 11:55 PM in Miscellaneous | Permalink | Comments (0)
By Donald Zuhn –-
In an open letter posted on February 26, six life sciences business leaders called on other members of their industry "to cease all business involvement in Russia." The authors of the open letter included Meg Alexander, Chief Corporate Affairs Officer, Ovid Therapeutics; Paul Hastings, President and CEO, Nkarta Therapeutics; Peter Kolchinsky, Managing Partner, RA Capital Management, LP; Jeremy Levin, Chairman and CEO, Ovid Therapeutics; Ted Love, President and CEO, Global Blood Therapeutics; and John Maraganore, Founding CEO, Alnylam Pharmaceuticals.
The authors of the letter encouraged "employees at all levels of all industries in all countries" to add their names to letter, and urged them to share the letter with their colleagues, noting that "[e]ven if the executives who lead your company have not signed this pledge yet, your signature signals your support of them to do so." As of 11:00 am ET today, the letter had collected 860 signatories (a full list of the signatories can be found here).
The authors begin their letter by stating that they "are appalled by the unprovoked war started by Russia against its neighbor Ukraine," adding that "[t]his barbaric act will lead to substantial loss of life, trauma to millions of people, and the dislocation of civil society in a nation that has repeatedly expressed its peaceful intentions." The authors conclude that "this is a criminal act deliberately committed by Russia," which will have ramifications that "touch the entire globe."
Declaring that they "reject the actions ordered by President Putin and the failure of those who enable and embolden him," including "the captains of Russia's industries" who support him and stand by him, the authors urge those Russian business leaders "to collectively steer Russia towards peace." However, noting that "[w]e must take action to make clear our abhorrence of Russia's actions," and arguing that "[i]mmediate and complete economic disengagement is required," they "call on all members of our industry, and others, to cease all business involvement in Russia" (including "other countries and their elites should they join Russia in its invasion of Ukraine"). In particular, the authors pledge to:
• Cease investment in Russian companies and new investment within the borders of Russia
• Reject investment from Russian funds
• Halt collaboration or service agreements with Russian companies
• Except for food and medicines, halt trade in goods with Russian companies
The authors note that the above actions would be reversed "upon the restoration of peace and democracy in a sovereign Ukraine."
The authors also ask their colleagues "in all the industries in the United States, including software, social media, IT, agriculture, legal and financial services, medical devices, medical instruments, and minerals, to take the same steps and withhold assistance to oligarchs who enable this war."
The authors conclude their letter by commending "the brave Russians opposing their government at home" and expressing admiration for their courage, and declaring that:
We stand with our colleagues, friends, and families in Ukraine bravely fighting the invading army. We support you, and you are not alone.
Posted at 11:59 PM in Miscellaneous | Permalink | Comments (0)
By Kevin E. Noonan --
The issue of standing can be outcome-determinative: without it, no matter how worthy a party's position or arguments, a court will not consider them without standing. The vagaries of standing and its importance were illustrated this fall in the Federal Circuit's opinion in University of South Florida Research Foundation, Inc. v. Fujifilm Medical Systems U.S.A., Inc.*
The action arose over a dispute involving an invention described in the opinion as "Workstation-User Interface for Digital Mammography." This invention was initially disclosed by faculty at the University of South Florida who assigned their rights to the University. A later assignment of what is presumably a "new and improved" version of the invention was assigned by these inventors five years later, leading to filing an application resulting in U.S. Patent No. 6,630,937, entitled "Workstation Interface for Use in Digital Mammography and Associated Methods."
The details of the relationship between the University and University of South Florida Research Foundation (USFRF) are obscured by redactions, but under a nunc pro tunc license agreement (putatively) relating to the '937 patent between these Florida entities, the USFRF filed suit against Fujifilm for infringement. USFRF asserted a chain of interest in the patent in the complaint running from the inventors to USF to USFRF:
The inventors of the '937 patent assigned their rights to the University of South Florida in Tampa, Florida. The University of South Florida in turn assigned their rights to the '937 patent to the Plaintiff in this lawsuit, namely the University of South Florida Research Foundation, Inc. ("USFRF"). USFRF is currently the owner of the entire right, title and interest in United States Patent No. 6,630,937.
Nevertheless, Fujifilm moved for summary judgment that USFRF lacked standing to sue, arguing that the license agreement did not transfer "all substantial rights" to the Foundation for it to bring suit by itself. The defect, which USF attempted to "correct" if permitted to file a Second Amended Complaint, was that rather than assigning all right, title, and interest to the Foundation, the University had just granted an exclusive license. The District Court dismissed the action (without prejudice) under Federal Rule Civil Procedure 12(h)(3) for "lack of both statutory and constitutional standing"; as explained in a footnote, "statutory standing" referred to 35 U.S.C. § 281, which the Federal Circuit characterized as "simply a statutory requirement" rather than a separate form of standing. The defects in the license relied upon by the District Court included a lack of "an exclusive granting of the right to defend the patent to USFRF," the lack of any language regarding "the transference of the right to sue," and the lack of any provisions that "limit[ed] USF's ability to bring suit for alleged infringement." Importantly, the District Court also considered the license's "grantback" provisions that permitted the University to practice the invention for "internal research, clinical, and education purposes" as standing-precluding provisions. The District Court's constitutional (Article III) standing decision was based on USFRF's refusal to disclose the invention disclosure referred to in the license, which the Court held was a "necessary document"; another consideration was a question of whether the right to sue had been transferred prior to filing the complaint. USFRF appealed.
The Federal Circuit vacated the District Court's decision dismissing the action on standing grounds and remanded, in an opinion by Judge Stoll, joined by Chief Judge Moore and Judge Reyna. The issue, framed by the Court's recitation of a litany of its precedent, is whether "an exclusive license is tantamount to an assignment," which depends on "the intention of the parties [to the license agreement] and . . . the substance of what was granted," citing Alfred E. Mann Found. for Sci. Rsch. v. Cochlear Corp., 604 F.3d 1354, 1358–59 (Fed. Cir. 2010), quoting Mentor H/S, Inc. v. Med. Device All., Inc., 240 F.3d 1016, 1017 (Fed. Cir. 2001). The panel noted that while there had been decisions where the rights that needed to be transferred to establish standing to sue had been discussed, the Court had never "established a complete list of the rights that must be examined to determine whether a patentee has transferred away sufficient rights to render another party the owner of a patent." Instead the Court had adopted a "totality of the agreement" approach, wherein "[a]mong the factors that we consider, the exclusive right to make, use, and sell, as well as the nature and scope of the patentee's retained right to sue accused infringers are the most important considerations in determining whether a license agreement transfers sufficient rights to render the licensee the owner of the patent," citing Diamond Coating Techs., LLC v. Hyundai Motor Am., 823 F.3d 615, 619 (Fed. Cir. 2016) (quoting Alfred E. Mann).
Applying this precedent, the panel compared the rights transferred here with rights transfers deemed sufficient to satisfy the standing requirements. In Alfred E. Mann, for example, the licensor's retention of the right to sue for infringement was "the most important factor in determining whether an exclusive license transfers sufficient rights to render the licensee the owner of the patent." "[A] broad right to decide whether to bring suit and to control litigation is thoroughly inconsistent with an assignment of the patents-in-suit to [a licensee]" according to that opinion, thereby setting out a well-defined basis for finding lack of standing. Similar considerations applied in AsymmetRx, Inc. v. Biocare Med., LLC, 582 F.3d 1314, 1321 (Fed. Cir. 2009), where the patentee retained "substantial interests in the patents-in-suit," including the right to sue for infringement. Finally, in Diamond Coating, limitations on the licensee (including prohibition against licensing the patent without licensor's permission, a grantback license that included a right to sell patented products and control over decisions regarding enforcement) precluded the licensee from having standing to sue on its own behalf.
Here, the panel opined, the District Court was not incorrect in finding that USFRF was not a patentee as defined in § 281 and could not sue without joining USF. The Court's decision was grounded in the first instance on an absence in the license of transfer from USF to USFRF of the right to sue on the patent. As synthesized by the Federal Circuit, "[t]he agreement's silence on the right to sue accused infringers does not show an intent to transfer that right. Rather, it shows that USF retained the important right to enforce the patent against accused infringer," and the panel decision was thus consistent with their Alfred E. Mann, AsymmetRx, and Diamond Coating precedent. Additional features of the license (including redacted provisions on reservation of undisclosed rights and a weighting of infringement suit recovery amounts) supported this conclusion. And the panel rejected USFRF's attempt to rely on their decision in Speedplay, Inc. v. Bebop, Inc., 211 F.3d 1245 (Fed. Cir. 2000), regarding a transferred royalty-free right to sublicense.
Turning to Article III standing, the Court applied Second Circuit law relating to USFRF's failure to disclose the invention disclosure and failure to provide evidence of when the license agreement was signed. On this issue the Federal Circuit held that the District Court erred in deciding that production of the invention disclosure was the only way USFRF could satisfy the requirement that the license covered the '937 patent, because doing so would involve waiver of attorney-client privilege and work-product protections. The Court found sufficient disclosure in the license of the equivalence of the invention disclosure and the '937 patent to establish that the license extended to that patent. According to the opinion, "[t]he correlation of the patent application serial number listed on the assignment and the face of the patent should have been sufficient in this case to prove that the license agreement covered the '937 patent."
Also, the Federal Circuit held that the District Court erred in finding lack of Article III standing due to the undated nunc pro tunc license that failed to show when it was signed. According to the panel, "[e]ven if the license agreement was signed after the filing of the complaint, USFRF would have held at least one exclusionary right in the patent under [a Revenue Allocation Agreement previously entered into by the parties]." Constitutional standing arises when a party holds at least one such exclusionary right under the Court's precedents, including WiAV Sols. LLC v. Motorola, Inc., 631 F.3d 1257, 1265 (Fed. Cir. 2010); Morrow v. Microsoft, 499 F.3d 1332, 1340–41 (Fed. Cir. 2007); and Intell. Prop. Dev., Inc. v. TCI Cablevision of Cal., Inc., 248 F.3d 1333, 1347 (Fed. Cir. 2001), according to the opinion.
Whether USFRF can cure the deficiencies in statutory standing under § 281 will be the issue the District Court will be asked to decide on remand, because as explained in the opinion "the district court's dismissal was predicated on [USFRF's lack of] constitutional standing" and thus did not consider USFRF's attempt to cure in its Second Amended Complaint. But both USF and USFRF believed the Foundation had standing to sue, and the District Court's decision on statutory requirements for standing and the Federal Circuit's opinion illustrate how wrong parties can be in arranging their agreements to be consistent with the rubrics discussed in this opinion.
University of South Florida Research Foundation, Inc. v. Fujifilm Medical Systems U.S.A., Inc. (Fed. Cir. 2021)
Panel: Chief Judge Moore and Circuit Judges Reyna and Stoll
Opinion by Circuit Judge Stoll
* The opinion was handed down under seal on October 22nd and then reissued on November 23rd in partially redacted form.
Posted at 10:51 PM in Federal Circuit, Miscellaneous | Permalink | Comments (5)
Supreme Court Narrows Federal "Anti-Hacking" Law to Exclude Enforcement Against Those Who Use Otherwise Authorized Access for Improper Purpose
By Joshua Rich --
There is a well-worn legal maxim that "hard cases make bad law." In deciding Van Buren v. United States today, the Supreme Court was faced with the opposite problem: bad laws[i] make hard cases. Specifically, in a 6-3 decision, the Court found that the Computer Fraud and Abuse Act ("CFAA") does not extend to an individual's accessing information over the internet for an improper purpose, so long as the individual would be entitled to access for a proper purpose. There's no question that interpreting the opaquely-worded CFAA forced the Court to choose between two bad options, with a parade of horribles on both sides; it chose the option that clearly decriminalizes everyday behavior (but also would allow abusive use of access that individuals have solely for work purposes).
The CFAA (codified at 18 U.S.C. § 1030) was enacted in 1986, based on a number of hacking incidents as well as -- allegedly -- Reagan White House viewings of the movie "War Games." It was originally intended to deter hacking into government computers, financial institution networks, and other "protected computers." For that reason, it established that a person commits a crime when he or she "intentionally accesses a computer without authorization or exceeds authorized access, and thereby obtains . . . information from any protected computer." In that context, "the term 'exceeds authorized access' means to access a computer with authorization and to use such access to obtain or alter information in the computer that the accesser is not entitled so to obtain or alter." And the term "protected computer" includes any computer "which is used in or affecting interstate or foreign commerce or communication, including a computer located outside the United States that is used in a manner that affects interstate or foreign commerce or communication of the United States." With the advent of the internet and its expansion into every part of our lives, however, the portion of the law prohibiting exceeding access to protected computers has expanded the scope of the CFAA immensely.
Against the backdrop of this broad law came Sergeant Nathan Van Buren and a set of facts seemingly out of Southern Gothic lore. Sergeant Van Buren was a financially troubled officer in the Cumming, Georgia police department. He (along with the rest of the department) had been warned to stay away from Andrew Albo, a local widower in his sixties with a penchant for much younger women, including prostitutes. But instead of staying away, Van Buren befriended Mr. Albo during an arrest for providing alcohol to a minor and helped him "handle" disputes with young women.
Seeing an opportunity for help with his financial woes, Van Buren told Albo -- falsely -- that he had substantial medical debts. He then asked Albo for a loan. But instead of appreciating Van Buren's position, Albo went to the county sheriff's department with recordings of the request and told them Sergeant Van Buren was shaking him down. The FBI got involved and decided to run a sting operation. First, it had Albo ask Van Buren for help running drugs, but the police sergeant refused. Then, it had Albo ask for information about a female friend that Albo had allegedly met at a strip club (specifically, information regarding whether she was an undercover police officer). Albo offered money in exchange for Van Buren accessing Georgia and national criminal databases to run the woman's license plates. Van Buren accepted the money and ran the plates, then texted Albo when he had done so. The FBI and Georgia Bureau of Investigation then swept in and arrested Van Buren, who admitted to all of the facts and agreed what he had done was wrong.
The local U.S. Attorney charged Van Buren with honest services fraud and unauthorized access to the government databases in violation of the CFAA. He was convicted on both counts, but the Court of Appeals reversed the honest services fraud verdict on the basis of improper jury instructions. Van Buren then took the CFAA conviction to the Supreme Court.[ii] Specifically, the Supreme Court considered whether a person who is authorized to access information on a computer for certain purposes violates the CFAA if he accesses that information for an improper purpose.
The six-Justice majority, in an opinion written by Justice Barrett, decided that the CFAA would not extend so far. The majority started with the text of the CFAA, and believed that the act was structured so that the two options for the offense (access with authorization or access exceeding the scope of authorization) would be parallel in a binary "gates-up-or-down inquiry." That is, because the only question for the first part was whether the accesser had authorization or not, the second part should be limited to the question of whether the accesser had authorization to access that information in any circumstance or not. In that sense, Justice Barrett used a physical analogy for the scope of authorization, describing the prohibition as relating to "particular areas of the computer – such as files, folders, or databases – to which their computer access does not extend." In doing so, she rejected the government's assertion that the majority's interpretation would read the word "so" (in the phrase "entitled so to obtain or alter") from the statutory definition of "exceeds authorized access." She indicated that the word "so" could be understood to distinguish the situation where an individual is not entitled to see the same information in non-computer-based means (such as, hypothetically, if a person were entitled to see a personnel file in hard copy by not electronically).
The majority also relied on the history of the CFAA's enactment and a parade of horrible possible applications of the law to reject the government's reading that it covers access for an improper purpose. The first version of the law that the CFAA replaced explicitly considered the purpose of access and the CFAA did not. However, the legislative history (which neither the majority nor the dissent mentions) expressly stated that the change was not intended to be substantive. In addition, the majority noted that the CFAA as read by the government could be understood to encompass everyday violations of terms of service, such as use of a work computer for personal reasons or embellishing online-dating profiles or using a pseudonym on Facebook. For all of these reasons, the majority held that exceeding authorized access related to computer structures, not terms (or purposes) of access.
Justice Thomas, writing in dissent and joined by Chief Justice Roberts and Justice Alito, disagreed with the outcome of the case primarily based on settled property law considerations. He saw nothing more definitive about the majority's reading -- any more of a "gates-up-or-down" approach -- than if exceeding authorized access considered what the circumstances of authorization were. In doing so, he analogized to property law, which generally protects against unlawful entry and unlawful use of property after entry. And he saw nothing more reasonable in decriminalizing access in all circumstances if there is a single exception than prohibiting such access if an authority had explicitly said so. For example, the majority's reading decriminalizes an IT administrator's actions in deleting every file on a computer minutes before resigning. Thus, Justice Thomas noted, the majority's reading of the CFAA constitutes a substantial narrowing of the law.
As a practical matter, the narrow reading of the CFAA shifts power from employers and the government to employees and website visitors. The CFAA previously provided an arrow in the quiver of employers to discourage employees from misusing their access to information or misappropriating trade secrets (it was another criminal offense that could lead to an arrest before the employee disseminated the trade secrets beyond the doors of the company). It also served as the primary basis for the federal government to charge employees who used IRS, Social Security, or law enforcement databases to stalk private citizens. On the other hand, it also chilled some investigative reporting and whistleblowing because of violation of terms of service for websites. Thus, every person who shops on their company computer or uses a fake e-mail address to avoid spam from a website can breathe a little easier. And we can all hope that Congress will take the Court's decision as a reason to rewrite the CFAA and bring it into the internet age.
Van Buren v. United States (2021)
Opinion by Justice Barrett, joined by Justices Breyer, Sotomayor, Kagan, Gorsuch, and Kavanaugh; dissenting opinion by Justice Thomas, joined by Chief Justice Roberts and Justice Alito
[i] Columbia University Law School professor Tim Wu called the CFAA the "worst law in technology" in a 2013 New Yorker article.
[ii] See United States v. Van Buren, 940 F.3d 1192 (11th Cir. 2019).
Posted at 11:51 PM in Miscellaneous, Supreme Court | Permalink | Comments (6)
By Donald Zuhn --
In a letter sent to President Joseph Biden at the end of March, Sen. Patrick Leahy (D-VT), Chairman of the Senate Subcommittee on Intellectual Property, and Sen. Thom Tillis (R-NC), Ranking Member of the Subcommittee on Intellectual Property, asked the President to "prioritize the appointment of intellectual property officials within the Executive Branch over the coming weeks."
Senators Leahy (at right) and Tillis (at left) note that "[e]nsuring that the intellectual property of creative artists, inventors and small businesses is meaningfully protected" constitutes a top priority for them, and point out that IP-intensive industries account for 45 million jobs and more than 38 percent of U.S. GDP. Recognizing the importance of IP to the Nation's culture and economy, the Senators ask the President to "move expeditiously to fill key Executive Branch positions that promote and protect intellectual property rights at home and abroad." Among those key positions for the Senators are the Under Secretary of Commerce for Intellectual Property and Director of the U.S. Patent and Trademark Office, the Intellectual Property Enforcement Coordinator, and the Chief Innovation and Intellectual Property Negotiator within the Office of the U.S. Trade Representative.
The Senators close their letter by indicating that "IP-intensive industries are poised to continue to be an engine for growth," especially in view of the damage to the economy caused by the coronavirus, and expressing their commitment to with the President and his Administration "to swiftly confirm qualified nominees for these critical positions."
President Biden's selection for Secretary of Commerce, former Rhode Island Governor Gina Raimondo, was confirmed by the Senate on March 2, 2021. The Administration has yet to nominate an Under Secretary of Commerce for Intellectual Property.
Posted at 10:48 PM in Miscellaneous | Permalink | Comments (2)
By Donald Zuhn --
Last month, Intellectual Property Owners Association (IPO) President Daniel J. Staudt sent a letter on behalf of the IPO to President-Elect Joe Biden and Vice President-Elect Kamala Harris "to recommend that intellectual property (IP) law and policy be priorities in your administration." The letter states that:
The IP system is fundamental to the nation's economic growth and job creation and to our global competitiveness. The importance of innovation is clearer than ever at this moment in our nation's history as we face challenges such as the coronavirus pandemic and related economic instability, the climate crisis, and the need to ensure diverse and inclusive representation of viewpoints.
With respect to the COVID-19 pandemic, the letter notes that "[t]he ability to leverage and build upon scientific research conducted over many years, made possible by the IP system, enabled industry to expedite the vaccine development process." The letter also points out that developments with respect to personal protective equipment and innovative computer-implemented technologies that have allowed us to stay connected during the pandemic were also the result of years of investment in innovation.
As for the climate crisis, the letter states that "IP is an integral part of developing new global environmental policies aiming for a more sustainable lifestyle based on green technologies," and expresses support for the incoming administration's pledge to invest $400 billion in clean energy and innovation.
The letter also declares that "[c]losing the diversity gap in innovation is also vitally important to our economic growth and global competitiveness," noting that women, people of color, and other minority groups are vastly underrepresented in the patent system. The letter points out that recent "scholarship indicates that increasing participation in inventing by underrepresented groups could increase U.S. GDP by as much as 4.4%," and suggests that "[i]t is imperative that the public and private sectors work together to close this gap and harness our country's potential to innovate at greater levels than ever before."
Included with the letter is an Appendix providing several IP issues that "threaten sound innovation policy in the U.S. and worldwide," including clarifying patent subject matter eligibility; protecting trade secrets; ensuring predictable legal systems for all industries and technologies; addressing counterfeiting and trademark infringement; and providing high quality, enforceable IP rights and predictable legal systems in the U.S. and abroad.
With respect to subject matter eligibility, the letter notes that the IPO "continue[s] to believe that legislative action is needed" to address Supreme Court decisions that have "detrimentally affected areas such as precision medicine & artificial intelligence and risk[] a chilling effect on further developments and investment in these critical technologies." On the issue of trade secret protection, the letter states that "[i]nadequate protection of trade secrets abroad harms not only companies whose property is stolen, but also the country where the theft occurs, because companies are then less likely to form joint ventures and make high-value investments in those countries."
The letter also argues that unfounded assertions continue to be made that IP rights constitute a barrier to innovation in order to justify compulsory licenses and forced technology transfer. In particular, the letter states that:
IPO members continue to witness concerted efforts to weaken intellectual property rights in the name of development, access to health, and environmental concerns. Intellectual property rights have been unfairly portrayed as a barrier to technology transfer based on arguments that they limit availability of technologies and make them more expensive to secure. The threat of intellectual property erosion, however, actually increases the cost of technology and slows its adaptation and deployment.
The letter notes that the IPO continues to strongly oppose compulsory licensing of intellectual property rights with respect to all industries and technologies, adding that "[a]lthough IPO recognizes that compulsory licenses of IP rights may be legally permissible in limited and rare situations, IPO believes that licensing of IP rights is best accomplished through voluntary efforts."
The Appendix concludes by touching on the issue of backlogs and other bars to securing IP protection, noting that "[i]ncreasing global competition drives IPO members to innovate faster than ever before, and in many cases product life cycle times are becoming extremely short" (as, for example, the unprecedented short timeline in which multiple COVID-19 vaccines have been developed). In view of shorter product life cycles, the letter contends that "debilitating application backlogs at patent and trademark offices are at odds with the pace of innovation."
Posted at 11:59 PM in Miscellaneous | Permalink | Comments (1)